Posts Tagged ‘NAB 2011 trends’

France-based broadcast asset management software solutions provider Dalet announced that its consolidated revenue for the full year 2010 was €25.5m, a 32% increase versus 2009. Excluding a €3.9m contribution from the Italian subsidiary Gruppo TNT acquired in July, 2010 revenues were up 12%.

The company achieved gross margins of 81% during the year, down from 87% in 2009, reflecting Gruppo TNT’s higher percentage of hardware in their sales mix. Operating profit increased significantly to €1.2m, compared to €0.0m in 2009. Net Income for 2010 was €0.9m, compared to €0.1m in 2009.

Dalet CEO David Lasry said that the company’s 2010 results confirm that it is on the right track, and highlighted the company’s new “Dalet Sports Factory,” which will be launched at the NAB trade show next week in Las Vegas.

The 2011 NAB show is less than two weeks away and there appears to be a feeling of optimism in the industry, something that has been lacking for the past year or two. The economy is seemingly healthier, the financial performance of both broadcasters and technology vendors has improved, and digital media is a hot topic across many industries as companies roll out plans to bring video and audio content to a growing number of platforms and devices.

But there’s another group of industry observers who also have an interesting view on the outlook for the broadcast industry – investment bankers and private equity firms – and this year there appears to be more interest than usual from these players.

So what do investment bankers think about the broadcast industry, and what are their objectives for the NAB show? In a word: deals.

At this year’s NAB show, bankers and PE players should have plenty to keep them busy.

Video and audio technologies have become strategic to many companies outside of the traditional broadcast business, so bankers will use the NAB show as a way to find companies that might add value to a larger enterprise or a portfolio of companies.

Within the traditional broadcast industry, the improving economy has increased speculation about broadcast vendor M&A and consolidation.

Indeed, as shown below, our most recent research of senior executives at broadcast technology vendors reveals that while about a third of companies intend to retain their private status, many others expect to be involved in some sort of strategic transaction within the next 2-3 years.

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Recently Covington Associates and Silverwood Partners, two investment banks that focus on the broadcast and digital media industries, published pre-NAB “teaser” documents for their clients and prospects.

Covington’s pre-NAB market analysis provides a concise overview of macro drivers in the industry and highlights recent digital media M&A activity. This is (as far as I know) the first time that Covington has published a pre-NAB industry analysis, presumably driven their recently enlarged digital media team, which marries former industry executives and investment banking expertise.

Silverwood ends their deck with an interesting section on broadcast industry IPO, PE and M&A transactions, and why company valuations may differ, based on a number of factors. In doing they are seeking to balance creating excitement about M&A, and setting realistic expectations about valuations.

Overall both are worth reading, regardless of whether you are a vendor, broadcaster, or independent industry observer. They provide a perspective that is sometimes missing when people discuss the broadcast business.

At the end of the day the broadcast industry is a business; so when you head off to the NAB show, make sure you understand what both technology and financial people are thinking.